(Archived) (Minor concern) How likely is it that EN stops services

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I got triggered by the recent announcement from "XMarks" (a bookmark syncing service) which will stop their services in January 2011. All of a sudden it makes me realize how much i depend on web services (some free, some paid like Evernote). Though I think paid services are more reliable, I'm still a little (really just a little) concerned what would happen if Evernote decided to stop service. Would their user base be involved in such decision - well, perhaps not the decision making process, but perhaps a request to increase the fees for evernote (something which never happened with XMarks).Just a thought...

If California were to fall into the Pacific tomorrow, those of you still above sea level would still have access to all of your data thanks to the full synchronization done by our Mac and Windows clients. You could continue to use those applications for months or even years without any problems. If you ever wanted to stop using these client applications, you could use the "File > Export" function in either client to convert your notes into portable HTML documents, which should preserve most of the contents fairly well.

This isn't an accident. We believe that your notes are YOUR notes, and we are just holding them for you as long as you want us to. You should be able to get your stuff out of Evernote and leave any time you want. This is in contrast to some web-only services that offer no good migration path and effectively hold your data hostage.

If you wanted a bit more insight into our business model (i.e. how we make money), Phil has shared an unusually large amount of internal details with the press:

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I hope it's not a bad omen to say this, but if it ever happens, that you have to shut down your services i hope that you make your server software available to the public.

This way people could at least build their own private Evernote clouds. Although it might not be as easy as it sounds. I don't know.

I wish it would be possible today already. A lot of people with privacy concerns, like me, would feel a lot better if they could use their own servers to host the Evernote service. The company i'm working for also would like to use it's own private service, since we can't use a public cloud because of the sensible data we have store in it. If the configuration and setup of the service is manageable for an ordinary system admin, you could sell your server software to companies. Is that something you would consider?

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Today, September 30th, James Jaoquin posted another XMarks blog entry that discusses, in a little more detail, why XMarks isn't likely to become financially viable. You can read the full details here: http://blog.xmarks.com/?p=1945.

Relevant to this discussion, I want to quote two of James' comments:

In a true freemium model, we would hold some features back behind a pay wall. Successful services in this category typically see 1-3% of free users convert to paid. The popular service Evernote, for example, have said publicly that 2% of their free users convert.

For Xmarks, 2% of our two million users paying $10 a year would generate $400,000 of annual revenue. Today Xmarks costs over $2 million a year to run. For two developers in a garage this could be a nice business, but we had big aspirations (per point #1) and have already invested $9 million dollars to create the technology and grow the data corpus. If $2MM / year seems crazy high to you, remember that we staffed senior engineers to keep up with changes on multiple browsers and operating systems, plus a team building our search features.

Evernote charges $5 a month or $45 a year for their premium service. Assuming they have 3 million users (according to the Fast Company article Engberg linked to), Evernote should bring in $2.7 million at $45 apiece, which is a heck of a lot better than XMark's $400,000 projections. At this point, I think XMarks simply couldn't justify charging enough money to maintain operations. Would you pay $45 a year for a bookmark synchronizing platform, especially when there are free alternatives?

Evernote also has the additional advantage that they can raise prices if they need to. I can see power users paying $47 or even $50 a year, and shrugging off the additional costs due to inflation.

Disclaimer: I don't own stock in Evernote but they're one of the few cloud companies I'd seriously consider holding a few shares in for the long term.

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The 2% figure is the percentage of users that are Premium after one year. Two years after people start using Evernote, 5.5% of them are Premium. The graph keeps going up gradually from there as far as we can tell. That trend is why Evernote doesn't feel like we're trying to make a "fast buck" off of people. We would rather make years of "slow bucks" by demonstrating to you good value over a long period of time.

I think Phil's said something about 5% being a good target to balance the value for acquiring Free users and the revenue from paying users. We could eliminate a bunch of Free features to bump the % higher, but at the cost of fewer new users trying the service for a few months.

So, yes, we're cautiously optimistic about Evernote being a great company that will be around for many years thanks to our wonderful users!

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Thanks Engberg for sharing the articles (and others for the comments and feedback). The articles are indeed very interesting (and very detailed). I realize that there's always 'a risk' of the worst case scenario (e.g. here in NL we're almost all below sea level), but indeed compared to the XMarks business model i realize the Evernote model is different and has mitigated the risk of a service suddenly shutting down. Thanks again.

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Important topic, so thanks for the links. For an app like this, ongoing access to data seems to me to be more important than features per se, which is one reason I don't get impatient waiting for features I consider essential (hyperlinks!).

On features alone, I actually prefer Onenote, as I'm more of a note taker than collector, and its editor is outstanding. But I got nervous about Onenote's single-platform anchorage, and moved back to Evernote. Sure enough, I subsequently ended up using OS X more than Windows, which vindicated that decision. After using EN for a couple of years on and off, I finally paid for a subscription this year (so I'm an example of a customer coming round to willingness to pay as a consequence of finding EN useful over a period of time). I would not have stuck with EN if not for 3 considerations: an exit strategy (full HTML export), multi platform support, and reason to believe that the company is likely to be around for the long haul.

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I really appreciate the links provided by Mr. Engberg. I've been a user of EN since Dec 2008, and a paid user since April 2010. It took quite a while to figure out how EN could work for me, but once I did it was full steam ahead. I've been scanning everything in my office - and hoping for a ScanSnap for Christmas. EN clearly has a great business model and I look forward to years of use. Best $5 I spend every month.

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I really like the privacy, security, and sustainability model of Evernote for the users, but the only current export functions that I can see right now is into the .esex format as well as the HTML format.

This means that the stuff can't necessarily be imported into another application. Right now, no other application reads .esex files so the export function is really aimed only for reimporting to Evernote/sending notes to other people. For the HTML, while I haven't tried before, I think it won't allow you to have the attachments and the PDFs within the notes to come out too.

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I really like the privacy, security, and sustainability model of Evernote for the users, but the only current export functions that I can see right now is into the .esex format as well as the HTML format.

Either you meant '.enex' format, or Evernote's gone into an entirely different line of business.

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I really like the privacy, security, and sustainability model of Evernote for the users, but the only current export functions that I can see right now is into the .esex format as well as the HTML format.

This means that the stuff can't necessarily be imported into another application. Right now, no other application reads .esex files so the export function is really aimed only for reimporting to Evernote/sending notes to other people. For the HTML, while I haven't tried before, I think it won't allow you to have the attachments and the PDFs within the notes to come out too.

Two of these options, it's true, depend on other app developers to do something with them (I know of at least one Mac app that does import *.enex files). But as there *is* no standard file format for interchanging notes between apps, what more could Evernote do? Who does this better?

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I'm a great example of the long-term users changing status. I first signed up back in July 2008, but I just switched to being a paid user (and *really* started using it) last month.

I would bet that the articles on Evernote's business model really understates how the proliferation of new devices is helping make it even more relevant. In the last six months, I've gone from 10 years of being in an all-Microsoft world (Windows PCs and a Windows Mobile phone) to having Windows PCs, an iPad, and an Android phone. That shift suddenly made Evernote a whole lot more interesting to me than it was back in 2008, when I first looked at it.

The really cool thing is that Evernote seems to have been improving continuously since 2008. In the past month since I've been using it a lot, it seems like every time I think of something I wish Evernote would do -- on any platform -- a new update delivers it within a few days.

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The really cool thing is that Evernote seems to have been improving continuously since 2008. In the past month since I've been using it a lot, it seems like every time I think of something I wish Evernote would do -- on any platform -- a new update delivers it within a few days.

OK, 'm gonna need you to concentrate on shared notebooks for the Windows client just now.